#Ireland #Galway #fiscal results #TE Connectivity #EPS Growth

TE Connectivity's Impressive First Quarter of Fiscal 2025

TE Connectivity plc (NYSE: TEL) recently announced its fiscal first-quarter results for 2025, ending on December 27, 2024. Despite a challenging economic environment, the company demonstrated strong operational performance, highlighted by a substantial adjusted earnings per share (EPS) and record cash generation.

Financial Highlights

In Q1, TE Connectivity reported net sales of $3.84 billion, consistent with the previous year's figure. The company faced some headwinds from currency exchange fluctuations, which complicated overall sales performance. However, notable achievements include:

• - GAAP diluted EPS from continuing operations reaching $1.75
• - An impressive adjusted EPS of $1.95, reflecting a year-over-year growth of 6%
• - Orders totaling $4.0 billion, marking a 6% increase compared to the previous year

Operational Insights

The operating margin stood at 18%, while the adjusted operating margin reached a record 19.4%. This success is attributed primarily to the company's robust operational execution. TE also reported record cash flow generation in the quarter with operating cash flow of $878 million, a 22% increase from the previous year. Free cash flow hit $674 million, up 18% year over year.

Approximately $500 million was returned to shareholders, while $325 million was invested in bolt-on acquisitions within the industrial segment. The company's consistent commitment to sustainability was reaffirmed as it was named to the Dow Jones Sustainability Index for the 13th consecutive year.

CEO's Remarks

Terrence Curtin, CEO of TE Connectivity, emphasized the company's effective navigation through an uneven automotive production landscape, ensuring strong results while fostering innovation in key growth areas such as electrification and next-generation vehicle data connectivity. He stated, "I'm pleased that our team began the fiscal year with a strong operational performance, highlighted by adjusted EPS above guidance and records in both adjusted operating margin and first-quarter free cash flow."

Market Drivers

TE Connectivity's success can be credited to its dynamic Industrial Solutions segment, which achieved double-digit sales growth. This increase was particularly driven by rising demand in artificial intelligence programs. TE is also experiencing ongoing strength in its ADM and Energy businesses as it scales operations to address evolving market trends.

Future Predictions

Looking ahead to the second quarter of FY 2025, TE Connectivity anticipates net sales nearing $3.95 billion. The GAAP EPS from continuing operations is projected to be around ($0.05), influenced by a non-cash one-time tax adjustment. Nonetheless, adjusted EPS is expected to grow by 5% year-over-year.

Conclusion

TE Connectivity's strong Q1 results suggest a bright outlook as it continues to capitalize on long-term growth opportunities and focus on expanding its operational capabilities. As industry trends shift towards AI and electrification, TE is well-positioned to maintain its momentum and return value to shareholders.

For more information, visit TE Connectivity's website or join the upcoming conference call for investors scheduled for today at 8:30 a.m. ET.